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 Sep. 20, 2010 DTN/The Progressive Farmer reports: by Chris Clayton Lobbyists for farm groups, nutrition, conservation and rural development got a sobering briefing this week about the budget hole facing the 2012 farm bill. With the public demanding less spending, a lot of farm bill programs could be in jeopardy as lawmakers try to craft a bill that doesn't spend more than the 2008 farm bill. With the public demanding less spending, a lot of farm bill programs could be in jeopardy as lawmakers try to craft a bill that doesn't spend more than the 2008 farm bill. Right off the top, there are 38 programs in the 2008 farm bill that don't have a budget baseline for past 2011. To build those programs into the baseline for those five years would cost about $9 billion. None of that bodes well for anyone wanting to make dramatic changes in policy, a packed crowd heard at a Farm Foundation meeting Tuesday at the National Press Club. "If this farm bill tries to do a whole lot different from what the 2008 farm bill is, then I'm afraid this is going to be the worst budget for a farm bill in a long time," said Craig Jagger, chief economist for the House Agriculture Committee. Some major programs going into 2012 without a mandatory budget include the permanent disaster fund -- the Supplemental Revenue Assistance Program (SURE) -- as well as the Wetlands Reserve Program and the Grassland Reserve Program. Further, several major Rural Development programs and practically none of the USDA energy programs have a baseline. "Many of these programs, I would argue, are going to be key to creating the coalition it's going to take to pass a farm bill in this fiscal climate," said Ferd Hoefner, policy director for the Sustainable Agriculture Coalition. Adding to budget headaches, there are about $4.5 billion in timing shifts that were used in the last farm bill that cannot be repeated. In the last farm bill, lawmakers needed about $10 billion in spending over 10 years, largely to boost nutrition spending that would garner votes from urban lawmakers. That drew the House Ways and Means Committee and Senate Finance Committee in to the bill with those lawmakers trying to dictate terms in programs to get funding. House Agriculture Committee Chairman Collin Peterson, D-MN, has insisted this time around he isn't going outside his committee again to ask for funding help. Spending on crop insurance also will draw more scrutiny in coming years. Commodity programs will cost $64 billion over the decade, but crop insurance will cost taxpayers between $76 billion to $83 billion in spending depending on different economic analysis. Higher crop prices and bigger yields are going to lead to higher crop insurance indemnities, said Pat Westhoff, program director for the Food and Agricultural Policy Research Institute at the University of Missouri. "We can actually have a situation where higher prices turn into more government spending," Westhoff said. Even though commodity spending could be lower as well, congressional budget rules don't build those savings into the agriculture baseline to spend on other programs. Westhoff later added that the lack of resources throughout the farm bill also will again lead to continuing talk about the $5.2 billion spent on direct payments annually. That's already happening, as groups such as the Iowa Farm Bureau have suggested eliminating direct payments to improve risk management in crop insurance. Farm programs could face cuts before a farm bill is written if lawmakers push for a budget reconciliation. That's when the budget committees ask other committees to reduce their mandatory spending levels. The 2006 budget reconciliation led to $2.7 billion in budget cuts in agriculture spending, though most of the change involved timing shifts in payments that are now prohibited. Sometimes, whole spending bills become part of the reconciliation debate. A farm bill done through budget reconciliation would mean it would have no new spending, but it would be paid for. "People need to be aware of the budget problems so they can, but probably won't, adjust their expectations," Jagger said. Lawmakers also are concerned about the Obama administration's new efforts to implement pay-as-you-go spending. The Conservation Reserve Program signup that just ended could not happen until USDA came up with $2 billion in cuts to pay for it, which was why the department took that money from reductions of spending in the crop insurance standard reinsurance agreement. Lawmakers were upset that the administration did this even though CRP is a mandatory spending program. It raises questions regarding whether USDA will require another budget cut elsewhere to pay for the next conservation enrollment, or whether Congress will take away some discretion from USDA on spending in the next farm bill. The crop insurance agreement took away $6 billion in spending over 10 years. The administration attributed $4 billion of those cuts to deficit reduction. If there is a budget reconciliation, members of the Agriculture Committee will make the case they have already contributed $4 billion in cuts. "You can be very sure that argument will be made," Jagger said. Tweet |
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